Skip to main content

tv   Closing Bell  CNBC  January 30, 2018 3:00pm-5:00pm EST

3:00 pm
let's give you not a check, please, but a market check, please 350 points is good enough for a 1.4% decline all market indices suffering 1% at this time. >> thanks for watching "power. you have to watch "closing" to see what happens with this market don't move. hi, everybody. welcome to the krb c"closing be. i'm kelly evans. >> i'm wilfred frost in for bill griffeth the market having its biggest 200% drop since 2017. >> let's get to bob on the floor. >> a lot of things affecting the market the most important thing is let's call it sell the reflation
3:01 pm
trade. here's a good example. 3m, down $4, 1.6%. that's almost 30 points in the dow. another big industrial name. excuse me, scott, let's move over here and showing you boeing down almost $4 that's another 30 points essentially off the dow, 1%. another big industrial name. then we get to some very specific stores, this health care story we've been telling you about, the berkshire story and amazon story look what it's done to united health group this is the biggest health insurer in the united states dow component. $10 to the downside, that's about 70 points in the dow jones industrial average another specific story mcdonald's down $6 mcdonald's had good earnings beat but they have that big $1 menu there are concerns that cheap menu might drag down growth. that's another 40 points you put these four stocks together, that's about half the decline in the better than 300 points we saw? it the dow dow is price-weighted. there's not much positive today, but the market is very defensive
3:02 pm
in tone. there's some telecom stocks that are up the all stalwart, procter & gamble, the only thing in the dow to the upside. >> thank you bob pisani let's bring in michael santoli with an eye on the volatility index spiked above 16 today. >> it's at the highest level since august we all know last year, 2017 was one of the calmest years on record, depending on how you measure it it might have been the calmest in more than 60 years back to the mid-'50s what we know about this year when you have slow and steady events is they're followed by a jumpy market not necessarily a down one the way to think about it is whether an airplane has kind of leveled off after the steepest part of its assent, it doesn't fall out of the sky but maybe you have a little more turbulence that seems to tb what's going on pent-up selling because we went up in a straight line. you also have kindling inflation expectations and a little more doubt about what the fed reaction might be. that's all playing into it, too.
3:03 pm
also heavy inflows into stocks it's a more emotional higher energy tape. i think that has to do with the upside and downside. even when the market was going investigator skal in january, we were talking about how the vix was inching higher. >> when we consider how long this selloff/pullback might last, does it matter how broad it's been? all sectors of the s&p 500, two lower and utilities and telcos are hardly moving. >> i wouldn't say that necessarily means it's going to continue longer. just for a little context, the s&p 500 right now is back at the level it traded at last month. you've essentially done last week's tack-on rally to the prior gains from january. >> not to mention we're down even 400 points, about a percent and a half i'm so used to thinking about the dow in ten thousand -- no, it's not - >> and the s&p down even less. >> that, too >> still over a percent for all three of the big indices. >> right it's a definite change in tone
3:04 pm
from last year when all of these were contained we were talking yesterday about how we had the first decline of at least 0.6% in 100 trading sessions yesterday. >> exactly that was -- it broke the streak. quite a remarkable rise and then the selloff today. we'll see you next hour. thank you. let's get to our "closing bell" exchange, shall we joining us are caleb from whittier trust, steven sarge guilfoyle and rick santelli from the cme. welcome, everybody le sarge, what do you make of the selloff today? look, it has been a while since we've seen the dow jump 400 points. >> it kind of makes sense to me. all the reasons mike and bob went over, they were all valid, but there is an enforced $20 billion outflow based on the pension funds that has to happen over this three-day period ending tomorrow. so, you want to know when this ends i would say thursday is a pretty good bet. >> why pension funds >> there's almost a rebalancing. at the end of the month, end of
3:05 pm
the quarter based on how stocks and bonds have performed because stocks went basically parabolic at one point during the third -- i guess the third week of january, this exacerbated the usual outflow we would have to see out of equities and into bonds. we're not seeing that into bonds yet but the bond market is pretty huge. we might see what should be a $16 billion inflow into the bond market in one day. so, while i know this is a reason for everyone to get nervous and a lot of my people are e-mailing and they are pretty nervous, i don't see it yet. in fact, i've done more buying than selling today. >> caleb, second big day of selling in a row are you nervous? >> i wouldn't say that we're nervous. it's healthy to see a little correction we would be more nervous if the dow was up 500 points, unabated, upside with no consideration for risk there's clear reasons why the market is correcting a little bit today. i think the amazon news partnering with jpmorgan and
3:06 pm
berkshire haltthaway, that opens up a huge list competing with amazon and the market is adjusting accordingly. >> would you draw a straight line between the interest rates and move or no >> i think it's more a function of the new fed regime coming in, global rates outside the u.s. finally moving high, bund yields surmounting 60 basis points. the time is come i think the equity market moving higher should have brought that reconnect months and months, thousands of points ago, but it didn't, so i think it's getting to soup with regard to interest rates. sarge, i completely agree with you. all my drexel equity guys still on the street, still working for about two weeks have been sending me unlimited amounts of e-mails on this january's rebalancing being huge looks like they were right i thought maybe some of the buying would suck it up more but that along with the chinese new year, which is two weeks from friday, fed meeting, you
3:07 pm
know, everybody knows nothing major's going to happen tomorrow or shouldn't happen tomorrow, but it doesn't mean janet yellen's tonight couldn't be more hawkish i don't think that's going to happen, but i have to tell you, many people do and i think when you put all that together with the president's speech, the notion of what's going on with the budget and immigration, i think that this is kind of the perfect storm for equities to do what they're doing. as far as interest rates, you know, the hchltd yg for the firm all year is in negativity territory. last year at 87.26 we're four points below that a few minutes ago when i checked all those things need to be paid attention to should the credit markets wake up more, especially in etfs or the barkley spreads? that transmission will definitely impact both fixed income and equities. >> sarge, let's talk about the president's speech, the state of the union, that rick just mentioned. are there any sectors off the back of that that could benefit
3:08 pm
you? you were having a look at defense stocks. >> oh sure i think this selloff comes at a perfect time for someone looking to take advantage of the president's speech i've been increasing all my longs in the infrastructure space and defense. if you look at the earnings of lockheed and raytheon, missile control is hot there's a little stock -- i've given it in the past, a drone stock. they sell drones tothe army an navy that's reconnaissance and fire control. for me i want to be long going into the speech because if this pops in the morning, you'll have something to put against your losses you suffered everywhere else. >> caleb, any moves you recommend? >> i don't think the selloff is big enough to take advantage of yet. if you look back to the late '90s, 1999, you saw 16 market selloffs in excess of 2% this is our first one this year. we saw only two of last year i think it's too early
3:09 pm
i think tonight you may see some rhetoric on infrastructure, but may not be enough to really move names tomorrow so, i would wait. >> do you just compare this market to 1999, caleb? is that your playbook? >> yeah, we're drawing a lot of parallels to the '90s. in is the second longest economic expansion in the post-war era, on pace to be the longest. eclipsing 100 months at some point this year. we look at the 1990s from 1990, which was a real estate bust, you had nine, ten years of expansi expansion, led by technology shares at the end of it. similar story here in 2008, you had a real estate bust, nine, ten years of expansion and then technology shares leading the market higher. >> you think about it that way, does that mean we'll end up in a bubble again, caleb? is there any - >> except -- >> except -- >> the dot-com, the last one was the housing bubble. >> there were 7600 stocks in our universe now 3600
3:10 pm
we have a scarcity problem and that gooses valuations. >> we've talked about that, too, the problem with getting companies to go public thank you for joining us today caleb, sarge, stephen guilfoyle. we're down over 1% for all three of the major indices the dow off 400 poipnts off the lows of the day. >> much more c"closing bell" after this. >> announcer: come up, market selloff. we're diving head-first into today's plunging stocks from all angles and looking at where you can still put your money to work right now. plus, the state of the union is just a few hours away. we'll tell you what investors want to hear and debate whether president trump's speech can help get the rally back on track. poan it here for the most poan it here for the most imrtt hour of directv has been rated #1 in customer satisfaction over cable for 17 years running.
3:11 pm
but some people still like cable. just like some people like banging their head on a low ceiling. drinking spoiled milk.trad, camping in poison ivy. getting a papercut. and having their arm trapped in a vending machine. but for everyone else, there's directv. for #1 rated customer satisfaction over cable, "closing bell" is back in a flash.
3:12 pm
3:13 pm
sno welcome back dow down 400 a bit, now down
3:14 pm
358. the dow is the worst performer united health, boeing weighing on that. treasury yields ticking higher and holding above 2.7% just as the fed meeting gets under way in chicago let's bring in steve liesman with more. >> thanks very much. it is chair yellin's last meeting and it's time to grade the chair and grade the incoming chairman, jerome powell. we asked an extensive set to 40 spopd ents yellen a b-plus in leadership, c-plus for powell. a-minus for economic expertise just a "c" for powell when it comes to that category c-plus and "c" for economic forecasting. nobody thinks the fed does a good job on monetary policy a "b" versus b-minus. two areas our group thinks
3:15 pm
powell is better, regulatory expertise, b-plus for powell and economic expertise communication, yellen does better and transparency yellen does better. powell has four years to work at this he's not been at the helm. the overall grade here, take a look -- the next -- yeah, overall grade for yellen is a "b," i believe yes, that's correct. for powell, a b-minus. not bad for an incoming chair. take a look at the outlook for fed's fund rate. 2.2. that's a bit higher than we previously forecast. the markets starting to build in that fourth rate hike. 3.2 for the long run what's happening right now is very clear the market baking in better expectations for growth and along with that, better expectations for higher rates along with, perhaps, a little more inflation, wilfred. >> yes, indeed thank you for that
3:16 pm
let's get reaction to that and today's market selloff chris wolf from first republic private wealth management joins us chris, good afternoon to you thanks for joining us. as steve just said, the markets pricing in higher rates, whether that's the fed fund rate or the longer end of the curve. do you think that's a key spot for the equity selloff we've seen in the last two days? >> yeah, we do we think there's a couple things going on the higher rate story an interesting one. at the end of the day it's sparked by realization we're at peak liquidity, total $20 trillion over the last several years. that's not likely to grow a lot from here. that realization is starting to dawn on markets coupled with the fact that i think you have some news items and the fact the market has become much more oriented towards momentum-type strategies meant that when you see corrections or see some of that news flow, we get shorter and sharper moves. >> chris, who's angie? first of all, it's a lovely
3:17 pm
name kimberly, thanks for that. a is alternatives. n is not, g good enough and y, yet. angy we used to call it tina. there is no alternative in market so you bought stocks. we're starting to see the rise of an alternative. with bond yields at low levels and stock valuations at high levels, the alternative in some cases may be cash. you have to look at it after inflation. the real cash yooeld, if you take the fed funds rate or two-year rate, for example, and some personal consumption expenditure is 50 basis points we have had a long period of negative real cash yields. it's now starting to be positive that could be april t tipping pt for investors looking at risk in this market. >> do you think there's opportunities for people to be buying any of these dips if
3:18 pm
people haven't got full exposure to equities? >> i think the answer is yes, as long as it meets long-term goals, you rick tolerance and those kind of things i think an interesting outcome is you'll get a bit more opportunities, either as market segment or some stocks go down further than others or business dynamics, like in the health insurance industry, are starting to change. it will create those opportunities to be more selective and thoughtful in rebalancing your portfolios. that said if you own a lot of hidden equity risk, we risk market profiting where we go from here is outside u.s. profit margins are improving and we don't believe it's built in taking stocks outside the u.s. >> i'll game you when the dollar keeps falling. thanks for joining us. >> thanks. >> chris wolfe the dollar is a little weaker today still below 90 on the dollar index. markets broadly we're seeing big
3:19 pm
selloff. >> interesting the dollar was up 0.3% today, down 0.3% today. it's not got any correlation with this selloff where yields rising has a little more. >> usually when you see panic you might see the dollar spiking. not seeing that here the dow the big underperformer the transports are down 117. russells are lower everybody's lower. a top technician checks the charts and gives us two names to buy on the dip. can the state of the union 'ldi steady the markets? 'ldi steady the markets? wel scuss what investorss think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. want before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
3:20 pm
back on track. blue-emu products; non-greasy, deep-penetrating formula that works down into your muscles and joints and works its magic. it's comfort that won't u smelling like a football gym bag or an old catcher's mitt or a shower mat in the locker room. how about an old pair of socks after an extra inning game. blue-emu, it works fast and you won't stink.
3:21 pm
3:22 pm
welcome back to the "closing bell." let's check in on markets. the dow down 1.25% at the moment s&p and nasdaq just improved to now be down less than 1% only three stocks on the dow are higher and fractionally higher and only two of 11 sectors on the s&p are higher and only fractionally. >> what are the three stocks higher >> travelers, procter & gamble and caterpillar. very small gain. caterpillar just went red again. >> let's get over to dom chu at headquarters >> it's tough to find a silver lining on a day when everything seems to be red. like ug said, there are some positive pots on the marketplace. if you take a look at the sector action overall, it may be no surprise it's got that risk on/risk off feel by that i mean to say the
3:23 pm
defensive or less economically sensitive, bigger dividend paying sec stores like the utilities and telecom stocks are the relative outperformers in this trade here. health care, we know what the drivers are with the amazon effect and energy on lower oil prices we'll wait for that private inventory data coming out later today. of course, government data auto oil coming out tomorrow. that will drive a lot of those sectors overall. as we talk about one of the reasons why maybe this isn't the huge panic a lot of folks are maybe trying to make this out to be right now, we know that interest rates are a big part of the picture. we know maybe rising rates is skauzing a little bit of the action in the stock market overall. in times like this, the ten-year treasury note would see maybe at least even a sliver of a flight to the safety bid. we know inflation expectations are on the rise. we see, perhaps, a fed rate cycle taking more of a hold in 2018 still, yields are actually higher on a day like today nol real bid for those safety of treasury bonds in today's kind of action. you wonder whether or not it's
3:24 pm
contained to the stock market at all. interest rate proxies are doing better today, dividend-paying sectors, but health care and energy are grabbing all the headlines. we'll see if health care remains in that position going forward. >> dom, thank you. big story today that triggered that health care selloff was the amazon/berkshire/jpmorgan partnership. >> the three big ceos in terms of dimon, buffett and bezos, they had been close, always chatted. dimon nearly joined amazon, i confirmed today. instead he went on and joined bank one and reverse merged into jpmorgan the three of them had always chatted in the past about how much they have to spend on health care and how poor the services are to their employees. that conversation increased at speed about a year ago when ted combs of berkshire hathaway joined the jpmorgan board. they had an insider that could move this forward.
3:25 pm
in the last two or three months, things moved more clearly forward where they decided to share health care information with that company which would have the information on its own, ring fence within that the reason they released it today without very clear details is because they have to start the search for a new ceo and they thought it might leak if they didn't release it now also in terms of what this really is for thesof these comps more to reduce costs than blow up the health care industry. jpmorgan spent around $1.25 billion on u.s. medical health care benefits. they feel with this new partnership they can improve the service their employees get and reduce that cost by 20% or more. it's a cost-cutting move as opposed to a transformational move into the health care industry fascinating how these three came together. >> for more on the deal, let's bring in michael baker from raymond james and anna guptin.
3:26 pm
thank you for your time. we saw a knee-jerk selloff in the health care space, especially insurers, pharmacy managers why do you think they'd feel under threat from this >> you know, this amazon effect or threat has been widely talked about. and most recently there was thought it was starting to die down and then you got today's announcement and so, you know, that's some of the reason we've seen, you know, the weakness in the stocks today. >> anna, you see this as more of a headline risk, a scare, as opposed to a long-temple fundamentfun term fundamental risk. >> i would be a big buyer on weakness i would pick united health and anthem and cigna as the three names that are oversold at this point. i think there is a reason that the stock is oversold. as you said, i think amazon was
3:27 pm
widely expected to come in and potentially disrupt the drug supply chain but i think the notion that they might come in more broadly on health care is what's surprised us i would remain a bit more cautious on the impact on the drug supply chain, including the retailers, cvs and walgreens and the wholesalers, mckesson, cardinal health and abc. i think there is much more, you know, efficiency gains to be realized there and much more that amazon can do in that regard >> it's a good point michael, i mean, for companies of their size, don't they usually self-insure anyway i don't know how that would change the relationship with the health insurers, but what do you think insurers themselves have to look as more companies look to cut cost in this way? >> they do self-insure the one thing i picked out of the release that hasn't been talked about at least right now, i think a big focus is on
3:28 pm
transparency we as consumers are being asked to pay more, yet we don't have a lot of those type tools. and if you kind of looked at the release, there's a lot of focus in on technology so, i think that's going to be kind of a key area i think one of the things to keep in mind if you're looking at a company like united is that i believe united is actually changing health care more and one of the reasons we saw the aetna/cvs deal more so than amazon, because in essence they're looking to get more in the provider side and provide us consumers with lower cost options like urgent care centers and surgical care centers rather than going to the high-cost er >> we've seen a lot of consolidation, of course, across the broader health care space in the last couple of years, some big deals. does this any any way lead you to think any other deals on the table are going to be sped up, people will be more incentivized to try to move quickly >> i don't think that this particular announcement will trigger more deals
3:29 pm
i believe very strongly that united health and optimum, quote/unquote, shown the way on medical and pharmacy benefits and really moderating hospital and health care utilization from an inpatient perspective i think the deals speculated are more about what cvs and aaetna announced. i have said i think the most likely targets are wellcare and h humana and cigna, walgreens and cvs. >> just to come back to how the drug industry may be more under a threat, how would you see this playing out if that is the goal or the shape that this takes with these three companies getting together >> so, amazon clearly has a very strong mail order fulfillment capability they bought whole foods, so they
3:30 pm
bring the bricks capability that would complement the clicks dimension. they have been seeking wholesale housing licenses on met tech and some might be parlaid into the pharmacy arena as well from that angle i think the wholesalers are a threat most particularly, the retailers, i believe, not just the front store on the drug chains with cvs and walgreens but also on prescription benefit side because they could clearly bring a more sophisticated mail order fulfillment capability to bear >> michael, just quickly, a final thought. what's the key name that stands out today as a buying opportunity on the weak bs . >> we continue to like united health care. i think they're leading the way. a key drooifrl change in the industry >> great stuff michael, anna, thank you for
3:31 pm
joining us. >> bye thank you. we'll be talking about the future of health care at cnbc's first ever healthy returns conference coming up march 28th in new york city for more information go to cnbc.com/healthyreturns. an update with sue herera. >> good to see you a bipartisan news conference held with former gymnasts who allege sexual abuse, dianne feinstein and chuck grassley hailing the passage of protecting athletes from sexual abuse act in the house they hope it sails through the senate today >> their efforts will help protect young athletes everywhere my work as chairman is not over after the president signs the bill i will do the oversight that's necessary to make sure that the bill is properly executed. pope francis is sending the vatican's most respected sex crimes expert to chile to
3:32 pm
investigate a bishop accused by victims of covering up for the country's most notorious pedophile priest mark salling from the show "glee" was found dead at age 35 from an apparent suicide it comes weeks before that actor was scheduled to be sentenced in federal court on child pornography charges. you're up to date. that's the news update at this point. back to you. >> sue, thanks for that. under half an hour until the closing bell the dow is down 1.25% or 330 points the lows of the day down some 400 points the s&p and nasdaq down less than 1% now, so we have recovered a little ground. up next, ubs's art cashin weighs in on tonight's state of the union and what thetraders on the floor here at the new york stock exchange want to hear from the president. later the financial sector pulling back with the rest of the market today it's still been a solid month
3:33 pm
for that group for that group we'll look at whethe oh, and there's the closing bell. for that group we'll look at whethe (sighs) i hate missingr january, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... strength and the banks can continue for the rest of the year trade 24/5, only with td ameritrade. this is a tomato you can track from farm to pot to jar to table, and serve with confidence that it's safe. this is a diamond you can follow from mine to finger,
3:34 pm
and trust it never fell into the wrong hands. this is a shipment transferred 200 times, transparently tracked from port to port. this is the ibm blockchain. built for business. built to run on the ibm cloud.
3:35 pm
welcome back to the "closing bell." we are off the lows of the day the dow was down 400 points at
3:36 pm
its lowest point it's now down 1.2% or 314 points, as you can see two stocks higher. caterpillar meaningfully higher, up almost a percent. clearly, it's a pretty broad selloff, 9 out of 11 s&p sector it is lower. >> as wall street watches this market plunge, americans are watching up to watch president trump's state of the yup tonight. a new piece in politico says the markets have become used to trump talk and don't expect him to go hard on topics like protectionism that might move the markets. >> art cashin, managing director of ubs thank you for joining us let's touch on the speech. are the people on the symptom exchange floor looking at it as a potential market-moving event? >> potentially, yes. if he presents it on a quiet, professional davos-like
3:37 pm
presentation, they think it could come off they expect he will be talking about the progress his administration has made. and he may touch ona few other things talk about bipartisan approaches to what's going on so, they're all crossing their fingers that there won't be any last-minute temptation to have him come off the teleprompter and stay right where he belongs. >> you know, as i've heard people say that today, i keep thinking, if i'm the president listening to this, doesn't it make you go, forget it, i'm just going -- i'm sick of everyone telling me i have to be teleprompter trump i'm worried it's going to have the opposite effect, arthur. >> well, it could potentially. hopefully the people around him and the white house counseling him are going to tell him this can be an absolutely golden opportunity for him. he's made some progress.
3:38 pm
we've been beginning to see the economy turning around this could be an important milestone, if he does it right sfwhoo the president loves to talk about the stock market. do you think he leaves that out given this two-day pullback? >> no, i think he will talk about the market having made record hide after record high, so on and so sfoert. he may concede it did pull back a little bit today, but they may be coming back on. >> what do you make of the fullback >> a couple things going on. the anxiety about the higher rates, you can see is that in reits and utilities. they're pulling back this market would probably only be down about 100 points right now if it weren't for the, quote/unquote, amazon disruption in the health care area. the fear is that if amazon comes in, profit margins can be badly disrupted and they're coming in
3:39 pm
with two rather powerful partners and that's going to impress everybody. >> is that a spark for the selloff? the likes of jpmorgan are down today. so, it's not like the market is celebrating two or three stocks with new initiative and selling off the rest because of it. >> no, i agree with you that the three people involved are not necessarily winners but it's the idea of disruption so, they're coming in. we haven't seen what comes out of the whole food merger completely they're out there, all people remember is the bookstore business they started selling books and suddenly 90% of the bookstores were gone. they're seen as disruptive and that affects the entire market. >> what i think of is the kroger move after the whole foods deal was announced. we can show it kroger traded down, i think, to the low 20s. maybe went under 20 for a while. in is after amazon came in,
3:40 pm
said, we're buying whole foods that was a knee-jerk drop. kroger erased all that i wonder if a similar effect could be playing out because the announcement this morning about whatever is going to happen with amazon and jp in the health care space is a long-term plan, it's not even clear what it's going to look like. >> that's exactly right. it's not only long term, but we lack details greatly that's a little of what happened with the kroger deal because they watched, they sold off. how bad is this going to be? and nothing happened with whole foods, okay? >> no dramatic changes no special deliveries, no whatever so, you know, kroger is still making money let's go back to that. you may see some more of that here in the health care area >> what about the interest rate move if rates are rising as they have done over the last couple of months, that means they are selling bonds, traditionally the money goes into equities
3:41 pm
that's not happened over the last couple of days. >> no, it hasn't what you should have seen and what sarge and a couple other people were talking about earlier is the end of month rebalancing. stocks have gone up so much that if the viewers imagine if you had a 60/40 portfolio in your bond fund and stocks have risen so high that the value of those stocks are now 70% of your portfolio. so, you either got to cut back on the stocks or buy the bonds we may see them cutting back on stocks but they're not throwing the money back in the bond market because we don't see that reaction. >> that only means bond prices will be supported, not equity prices that might mean yields come down in the bond market but doesn't necessarily mean equities will find a floor any time soon. >> true. but it's only a short period of time the last three days of the month, then maybe the first two -- >> if i knew nothing changed and people were forced to sell, i'd say, great but that's a big if.
3:42 pm
we'll see what happens arthur, thank you, as always 19 minutes until the close the dow is down 1.2% the nasdaq down 0.75 of 1%. still ahead, a big week for tech earnings. we have big companies on the horizon. we'll see if that sparks a we'll see if that sparks a tush-around from this two-day i think that she's a very nice girl... we'll see if that sparks a tush-around from this two-day you never got the brakes looked at? sellofday's leading manufacturers
3:43 pm
make things that think and do automatically. imagine that, a world of new digital products and services > can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital.
3:44 pm
today, innovation in the finger lakes is helping build the new new york. once home to the world's image center, new york state is now a leader in optics, photonics and imaging. fueled by strong university partnerships, providing the world's best talent. and supported with workforce development to create even more opportunities. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov.
3:45 pm
here's a look at sectors of the s&p 500. we have a couple in the green, telecom and utilitieses are up interestingly enough because we have interest rates moving higher today the rest of the market moving lower. you can see the worst performers, health care down nearly 2%. energy, same deal, almost down 2% today broad s&p is down 25 points. dow down 314. electronic arts is earneding headlines. let's get to julia for a quick preview. >> when ea reports its fiscal
3:46 pm
third quarter earnings after the bell, all eyes will be on star wars battle front 2, the big game released in november. the company's revenue is expected to drop and earnings expected to decline by 11.5% to $2.19 per share. the real question is what we learned. shares fell on battle front 2 -- shares fell following the release because of 2% because of controversy over the microtransactions where in-game purchases that ea had. the company shifted gears and the stock recovered those declines today, you see ea shares up nearly 1%. but that game will be in focus, as well as the company's guidelines for the next calendar year back over to you. >> thank you very much for that. stocks still selling off about 14 minutes to go to the close. we're a little off the lows.
3:47 pm
let's discuss the selloff with carter on what to buy. we're kicking off with the broader s&p 500. >> we're only 1.5% down. let's talk about the market first and then talk about dip buying as a concept. all i have here is a four-year chart of the market and the line draws itself i didn't manipulate it or fit it we've responded to this line quite precisely one, two, three times. were we simply to sell off to the line, the trend line that's been in effect since the lows, you would be looking at something in the order of about a 6% selloff that's nothing it would be another 5% from here we've had some 216 5% selloffs since 1929 this kind of thing is a garden variety thing. >> if we sold off more than that and broke the line, that would be worrying? >> the path lower starts with something small. i think there will be a line in the sand there. >> let's move on to a couple stocks you say we could be buying off these lows. >> if i were to just clear this and we take a look, there's two
3:48 pm
in principle prototypical dips to buy one would be a stock in an up-trend if you have an up-trend in principle, a dip to trend is one way to take advantage of weakness so, something that's been an up-trend that's given you an entry point. one would be allstate, would be pfizer this is buying a dip after a breakout you have well-defined tops from which a stock has broken out if, in principle, after breaking out you fall back to the level in which you broke out, that gives you an entry point either buying a dip or dip that's broken out. >> affected by the health care selloff today as well. some impressive straight lines drawn there, carter. cheers for joining us. >> he's got some skills up there. 11 minutes to go until the close. we were down 304 at the bottom everyone is still in the red financials a big decliner as we
3:49 pm
keep an eye heading into the close. we'll talk about the future of financials and what the llf seof financials and what the llf seof could mean for the res that "stand for something." you like her. she's always up on the latest trends. she got in early on the whole goat yoga thing. and her sunsets are alwayst offilter. you like her. but you'd like her better if you made more money than she does. don't get mad at @just_marea. get eátrade. year when "closing bell" comes back in two.
3:50 pm
3:51 pm
3:52 pm
welcome back 300 million to buy on the bell, according to art cashin. it flipped we had a significant amount to sell that when we saw stocks coming well off the lows less than 300 points a moment ago, practically a rally on a day like this. a small amount to buy. >> the market tumbling for a second straight day, taking down financials with it we're zeroing in on the sector and what we can expect for the rest of the year. >> saying goes, so goes the rest of the year. but does that hold for the financials sector? over the past ten years, financials have been down about 4% on average in january, underperforming the broader index, which averaged a drop of down 2%. however, this year's already off to a much improved start the financials as of last night's close were up 8% year to date slightly higher than the s&p, which was up 7%. so, could we be in for a big year for the financials? well, if history's any indication, the sector will be up, but not quite as much as the
3:53 pm
s&p. looking back at the past ten years when the financial sector is up in january, it rises on average about 13% for the year now, that compares to 15% for the s&p 500. while the sec store may not outperform, it does almost always improve after january some notable top performing stocks you may want to grab up, moody's up 49% on average for the year when the financials are positive in january. s&p global up 39% on average and discover up 36%. only one-long term loser when the financial sector is up in january. and just barely. >> thank you very much for that. one other short-term factor that's interesting from the banks and the likes of goldman sachs -- >> i knew you couldn't resist. >> i can't but it's important. volatility up significantly. >> trading operations below
3:54 pm
that. >> goldman sachs after their poor earnings when they declined a couple percent already up 7% that was after last night's close. 7% after the declines it had on the day. already reacting to that >> it's a double-edged sword if we keep going higher it's below 15 and goldman down 1% today. >> i couldn't resist but you were interested, at least a little bit. >> it was interesting. coming up, we're coming back with the closing countdown. >> after the bell, can tech rngsat ts ek turn the selloff around who's reporting and what investors need to know is still
3:55 pm
investors need to know is still to come on the "closing bell." driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era dr populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] ♪ good questions lead to good answers.
3:56 pm
our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. talk to one today and see why we're bullish on the future. let'sfist word that comes to mind when you think of low-cost futures trading. was it happy? what about a dedicated service team with futures licensed specialists? and what about being able to react to the 24-hour futures market with integrated trading across web and mobile? still happy? good.
3:57 pm
then it's time for power e-trade. the platform, price and service that gives you the edge you need. e-trade. the original place to invest online. welcome back to the "closing bell." just a few noits go to the close. we're looking at 320 point for the decline. we were down 400 points. 0.9% decline for the s&p if we look at the sectors now, health care the worst. clearly affected heavily that deal between berkshire hathaway, amazon and jpmorgan. energy the other big mover also down nearly 2% because oil prices are slipping by a similar amount tech and financials down a percent. a quick look at the dow because only two or three stocks in the green.
3:58 pm
caterpillar by far the most positive, up 0.7%. pretty much everything is down i'm going to quickly look at the ten-year as well 2.73% rising yields is one of the factors seen for why markets have been spooked. the dollar, though, not really reacting to yields over the last couple of days it was up a little bit yesterday. down a little bit today. the correlation with this selloff, not playing into the factor the way yields has been bob? >> i agree with that completely. dollar is not a big factor today. here's what's important. the good news is we hit the lows early on, about 10:30. 2800 on the s&p. we moved in a narrow range we're just off the lows but we didn't fall much further than that two observations the volume, it's not is that great. it's only a little bit above normal now, that tells me there is no panic selling going on number two is the vix. we'll talk about this on the other side the vix is elevated but there's not a level that would indicate
3:59 pm
panic to me. i'm not trying say it's an ugly day. it is. that reflation trade we keep talking about, that's clearly affected 3m, boeing are down the most there's clearly a little risk-off on that global reflation trade. >> no doubt the jpmorgan/berkshire/amazon deal has hurt the dow in particular. >> we had several substories united health, the biggest health care insurer in the country. 70 points in the dow is one stock, united health care because of that deal also mcdonald's, good earnings reports but there's concerns the dollar menu may hurt earnings down the row that was another 30, 40 points off the dow. a lot of moving parts but the global reflation story was, i think, the major issue right now. a lot of concern about where is the panic level for interest rates? >> oil prices down a couple percent. >> global commodities were down across the board
4:00 pm
that was a big issue all the big metal stocks down again. that's part of that reflation. >> that's why energy is the second worst sector after health care, utilities and tech also. utilities and teleco outperforming. that's the bell. we're down 350 points on the dow. lost an extra 30 points at the close. ringing the bell on the new york stock exchange, inspire investor rings. that's the first half of the krb c "closing bell. kelly with the second. thank you, wilf, welcome to the "closing bell. i'm kelly evans. the dow going out with a decline of 362 points. that's a 1.4% drop nearly. dow the worst performer of all the major averages that's the biggest decline we've seen for the markets the s&p dropping 31 points, better than 1% to 2822 today the nasdaq composite a little under 1% of a drop to 7402
4:01 pm
the russell 2000, similar amount, down 15 points today to 1582 the dow was down 411 points at the low of the session this afternoon. we closed only 50 points off those levels we have full team coverage of this plunge and whether it's the start of a bigger correction jackie is covering the energy market, bertha will talk about the moves on the nasdaq. we start with bob pisani in the middle of the turmoil. >> it is an ugly day there was no panic the good news is we hit the lows early on look at the s&p 500. that's what matters. 2820, that was the low but that was very early in the day, about 10:30 you see they meandered around throughout the day and not far from the lows. again, no selling at the close here take a look at the dow movers. we talked about this reflation trade, global economic expansion. 3m and boeing notably weak
4:02 pm
today. united health, down $9.50. concerns about that competition -- that consortium from amazon /amazon and jp mcdonald's weighed on the market and another important story, yields are up but the banks have been wobbly. goldman down 1.3%. where are we in the markets today? it was an ugly day 4-1 declining advancing stocks that was ugly. the volume was only slightly higher than normal that tells me there was no panic selling flooding the market. those sellers flooding the market with stock. volatility, the vix is at 14, that's up. again, does not indicate true panic to me. let's say some people are lightening up on their positions. rick to the market, we talked about higher rates going from 2.5 to 2.7 on the ten-year in three weeks. we don't know what this rebalancing is doing we don't know if pension funds are coming in buying and selling stocks to end the month. i want to see what happens
4:03 pm
february 1st sentiment very elevated. that's been an issue for a while. we had earnings numbers off the charts, but down the road in thor path latter part of the year, that will slow down a fascinating day and a lot of moving parts back to you guys. >> we already have earnings movers here, too let's get a look at the stocks dragging down the nasdaq bertha says notably apple. >> yeah, big tech definitely a big draw when you take a look at the nasdaq, we've been down four out of five sessions still on pace for the best monthly gain with one more day to go since september of 2015. up better than 7% for the month. among biggest losers today, chip stocks seeing a move to the downside we also saw health care with biotech also getting hurt a bit. overall large cap tech not down quite as much at there were big effects. apple the biggest drag along with microsoft express groups also a big loser
4:04 pm
on those concerns about what amazon, jpmorgan and berkshire hathaway might do with their new entity bucking the trend was amazon, hitting a new all-time high and workday which provides hr benefits for amazon. and sterner, which is seen potentially working with a.w. west on a cloud benefits or platform that would be in health care so, those two today maybe on speculation, bucking the trend back to you. >> bertha, thank you bertha coombs. energy was a loser after a big drop in oil prices >> that's right. a little less than 2% decline in oil prices today with crude closing at 64.350. that's a nice, round number but below the key $65 level. today it was a stock stories the market sold off, crude went down like it the correlation is based on demand if this was the start of a greater correction or cooling period, the thought is there wouldn't be as much need for crude oil.
4:05 pm
all of this is coming with a backdrop of a very important eia inventory report tomorrow. not only does the market expect to build starting the seasonal weakness, but tomorrow may be the day that u.s. production tops 10 million barrels a day. if it's not tomorrow, analysts think it's coming soon that's a bearish factor. the dollar doesn't have anywhere to go but up from here if it does, that too could pressure crude state of the union tonight, the fed, jobs on friday, all potential market and commodity catalyst guys, back to you. >> that's for sure the oil output is one of my favorite stories of, like -- i mean, of the century but this is not the time or place. jackie, thank you. joining me are cnbc senior markets commentator michael santoli and jim lecamp what stands out about the move
4:06 pm
>> we're down about 1.75% on the s&p in two days. you've skimmed away some of the froth which i think everyone acknowledged you built up. one-ray rally, pullback. sentiment with the condition of the market yields, i don't think necessarily had a trigger point in terms of where the ten-year is trading but that steady grind higher without let-up that i think is a psychological factor. really the rest of the kind of asset markets didn't kind of play along with this idea that it was a complete risk-off day it was a backing of of he can quits. >> it wasn't like we had a flight to safety - >> the credit markets were relatively calm. this could be a blip or this could be a sign that we're going to have a little more of a two-way market this year and you have the big slingshot of up 7.5% in three weeks, big payback. by the way, we've only mostly undone last week's rally
4:07 pm
that's what took us back to monday morning levels. >> there's a couple things to make this feel like not your typical selloff. the fact we've been straight up how many thousand points since thanksgiving >> up 18% since august >> right >> when you're starting at 26,000, 27,000, that doesn't add up to as much as it used to but what do you think? >> i talked to my bond desk and stock desk it was interesting the stock desk felt like the market was tanking a little today. a little risk-off trade. and potentially going into the state of the union tonight, some folks might be a little cautious we sold off the last time our president came up because folks aren't sure what's going to happen on the bond side, mike, it's interesting you should say where yields are on the ten-year not hitting a pivotal point but that 271 from my treasury desk was a key note to be over 272 and hanging in there consistently the way we are right now is triggering some folks to think, one, rates are
4:08 pm
going up the yield curve is going to continue to flatten, interestingly enough as well as the fact that we're going to hit 3% soon so, you know, it's an interesting time thevolatility folks are gettin excited about it so, you know, i'm excited, too that's better for us -- those folks that work on trading desks at investment banks. >> a lot of people looking at volatility and loving it jim, i don't know if you're one of them. what do you thinks about the selloff in the context of the kind of markets we've had here. >> there's not much of a selloff. we've had such a big run since the passage of the tax reform. all last year we had a strong and steady market anyway then you get the tax reform package and an angle of percent of the market that takes off, sentiment takes off. this week we have the fed, we have the president, jobs report, oil prices starting to slip. as everybody's mentioned, interest rates have started to mrip blip up. we think they'll end up 2.5% on the year which is below where we are now. if that's the case, i think
4:09 pm
stocks are going to be just fine because profits are so strong. 16% this year corporate profits. that's a pretty good backdrop. >> i wanted to mention, because you brought this up about trigger events around the president's speeches i have forgotten but you reminded me that the real strong trump rally last year was that whole period going into his congressional address in march. >> february 28th, actually so, that was the culmination of the core trump trade following the election march 1st you had this furious rally because it was a well-received speech the night before march 1st you had the peak in the banks, peak in infrastructure stocks, peak in a relative basis after that it was aid fang market, yields came down it was no longer about the economic acceleration small cap trade. who knows. >> i'll be thinking about that tonight. howard marks was on cnbc earlier and sounding a note of caution
4:10 pm
he said markets could be overvalued but take a listen >> the market is up, so, okay, tax bill, favorable, corporations, a lot of money stocks up, well, maybe but isn't the stock market up 20% in the last year wasn't some of that in anticipation of the tax bill is the tax bill and it's favorable impact favorably anticipated by prices? is it possible the law -- the tax law means the stock market should have gone up 20% and it went up 25%? could it be overvalued you can't say good news, price is up. that's the big problem that most people don't understand. >> the i liked that point. you know, people say, oh, it's up you mention the 16% earnings increase but how much is already priced in? how much of the move has already happened in the market >> we don't think it's all priced in yet at we're neutral over the next several months
4:11 pm
remember historically if you have a really strong january, then you pause for a little while. to mrl marks' point, i agree we've had all sorts of still every central bank from around the world for a long period of time that honeymoon might be over because the u.s. fed is starting to taper, we have unsteadiness from the bank of japan and european central bank. it means we don't have a runaway bull market. we have a bull market in certain areas. stock picking is rewarded. you can still make money in stocks but it's not going to be this parabolic move we've had as of late. >> you need to add to that >> i absolutely agree with him i think it's going to be a stock picker's market. and the names that are performing well where the fundamentals are strong, they're going to get rewarded for that even when you look at financials, on our desk we were net buyers at loop capital today. there are some gems out there. you have to find them and get them this whole passive shift, active
4:12 pm
to passive shift, i think the active managers are going to start to outperform here and they're going to find some good value in this market, too. >> let's talk about earnings electronics arts with julia and the numbers. >> ea shares shooting higher revenue missing estimates by a hair on those net bookings coming in. the stock is moving higher the company reported a gap loss of 60 cents per share but that's not actually comparable to estimates because in part the company is reporting that it recognizes $166 million incremental income tax expense, 57 cents per share due to the tax reform act enacted at the end of december. now, the guidance looks like it's strong here the company says it sees q4 bookings coming in at 1.225 billion versus estimates of 1.177 billion. also estimating q4 eps of $1.86
4:13 pm
a share. you see ea shares are up nearly 6% back over to you >> there's a rumor on that, ea and microsoft. i know you heard about it earlier today. >> i don't -- i don't traffic in rumors. >> hey, there's an m&a rumor right now. depends on who's starting it let's get to josh lipton. >> amd reporting 8 cents versus an expectation of 5 cents. revenue 1.$1.84 billion. the street was at $1.14 billion. turning to the guide saying for q1 look for revenue of about $1.55 billion plus or minus $50 million. the street was at $1.3 billion looking at the segments, computing and graphics desktop, notebook processors, that came in at $958 million
4:14 pm
better tl better than expected semi, chips, game console chips, $502 million that was a bit res than what the street was looking for this conference call starts at 5:00 p.m. eastern and we'll be on it. back to you. >> josh, thank you very much amd is down 6% this is a fun one to follow because it's been a monster stock. >> it's been a jumpy one it peaked almost a year alg. the rest of the semis diplomdn't it's kind of the whip end of semiconductor sentiment because it's on the smaller side therefore, kind of wider variation of what the results can be. >> my attention usually trails by about a year, so that makes sense. >> every other semiconductor stock has been soaring. >> what do you make of it, then, if it hasn't exactly been on a tear of late, then 6% drop looks a little more substantial. >> it does, at it was under 11 to start the year. i think it's one of those names that has a tremendous amount of
4:15 pm
whippiness to it >> whippiness? >> that's my favorite new adjective. >> i like whippiness. >> anything to add there >> no, no. we actually used to cover the name at loop, so it has some volatility to it like might said i think the semiconductor as a whole has been rallying. i'm not as concerned with amd. >> we're focused a lot on big tech earnings coming the back end of the week, apple, amazon, microsoft, so many others, but the chips have been really volatile so far this earning season anything further you'd say about it >> here's what i want to say about it look at the nasdaq today the nasdaq held in better than major averages which doesn't spell risk off to me it also tells me the market expects these upcoming earnings report from nasdaq companies to be strong. you look at the action and some leading names, they weren't down as much as the market in the nasdaq so, i think what the market's telling you is earnings matter here and that earnings from the tech sector are going to be pretty good.
4:16 pm
>> i'm just thinking even back to texas instruments, we covered that one big selloff after its report but it had been a good performer as well the last one is in let's get to morgan for results from the insurer. >> exclude be a tax benefit of $450 million tied to tax reform, core operating income adjusted for chubb, $2.28 a share that was a penny miss. net premiums written for the property and casualty unit, that's the other key metric everybody watches, $6.5 billion. that was also a slight miss. now, catastrophe losses, including reinstatement premiums was greater than the ano nounsment in november. $447 million of that the california wildfires were $320 million. property and casualty combined ratio, 90.7% and lastly, some pretty upbeat commentary from evan greenberg,
4:17 pm
the chairman and ceo of chubb, a strong economy both domestic and global and positive momentum continuing to build in a number of classes we are quite optimistic about our prospects for improved premium, revenue growth in the year ahead shares of chubb are down about 0.7% right now in after hours. back over to you >> thank you it's a little large number than some of the other insurers had for the california wildfires part of them were in really nice areas, those pricey homes, might be in more chubb's sweet spot for coverage even if it was mudslides that destroyed these homes, if the covered -- if the fire was the proximate cause, they -- >> yes. >> there's chubb down 0.75 of 1% tomorrow we get the fed decision, eco data and big earnings what do you think the setup is now?
4:18 pm
>> i think the fed meeting is one component of this on people's minds mainly because of the handover of the chair also because you have a little more latitude, it seems, in terms of their reaction to how the economy and inflation are going. just the fact that you have a little more doubt about three or four hikes this year, i think this might be an occasion for relief after this selloff, if they basically come out and say -- >> and reiterate courtney. >> i agree this is chairwoman yellen's last meeting. i'm hearing a little buzz as to whether or not the fed will get more hawkish i think the new regime will be similar to the old and we'll get that consistency of the direction of where they're going. i'm not as concerned there it will be interesting to see what comes out of it. >> what looms large for you this week >> i think more uncertainty, for one thing. the fed has to be very aware that they have been blamed for a lot of the recessions in the past, overaggressive fed has been blamed for 16 of the last
4:19 pm
18 market selloffs as well i think the fed will be sensitive about that remove the uncertainty, i think the market will be relieved a little bit the jobs number coming up on friday, big tech earnings on thursday i think by the end of the week we'll have removed a lot of the uncertainties piling up over the last two days. >> thank you, guys jim, courtney, talking about the markets today. appreciate it. much more ahead on the krb cnn. "closing bell. >> announcer: coming up from facebook to amazon and alphabet, can the tech giants help save the rally? we'll debate it. plus, under five hours to go until president trump's state of the union speech we'll tell you what investors need to hear from the commander
4:20 pm
in chief to keep the bulls happy. stick around "closing bell" will be right "closing bell" will be right back with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. sible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.
4:21 pm
we know life can be hectic. that's why, at xfinity, we've been working hard to simplify your experiences with us. now, with instant text and email updates,
4:22 pm
you'll always be up to date. you can easily add premium channels, so you don't miss your favorite show. and with just a single word, find all the answers you're looking for - because getting what you need should be simple, fast, and easy. download the xfinity my account app or go online today. dow down more than 400
4:23 pm
points at the lows got some major tech earnings on tap this week. names like alphabet, amazon, apple, can they save the rally joining us tim lesko thank you. i want you to take us through what you think the best opportunities are in the market right now, especially after the selloff. >> well, i think the selloff is indicative of a market that really rallied based on the expectation of tax reform and higher earnings. now we're faced with looking at the earnings and certainly tech companies that report this week can show the market a lot about what's been going on and give us a glimpse of the earning power into the future. at the end of the day, the market reports maybe the market will catch up to, perhaps, what was a stretch valuation and start to look cheap again if the forward-looking numbers are as good as some people expect them to be. >> you have kind of -- forgive me for calling it this, but old
4:24 pm
tech names you'd be picking as a buyer. ibm, intel, apple. you're not phased by the iphone production >> not really. whether or not people are buying iphone xs or loading into iphone 8s and 7s, apple is still selling a lot of phones and perhaps even at higher margins on the older models. whether this becomes a failed product or, perhaps, a product that gets discontinued early, the ecosphere is still very strong if you look across what -- i think you're right is the old tech space, you have very compelling valuations for company that are participating what's going on in the economy so, with apple at 14 times earnings, you really have a lot of room for maybe even some disappointment in numbers. >> as you say, intel, 13x. i see microsoft in here. who else are you a buyer of? >> broadly the software tech space, kelly software tech is a disproport n
4:25 pm
disproportionate beneficiary of capital spending with business profits being accelerated and capx upcycle under way, which we expect to only amplify as we go forward in 2018, to spend on software tech is going to continue to improve. that's a setup that bodes well for microsoft and, more broadly, something like the ige itf which hosted a lot of software companies which are not only going to go well by way of corporate technology, but technology, software is a subindustry of it, does exceedingly well. >> we were talking about the art and science of figuring out how much of the earnings forecast upside has already been priced in by the markets, whether from tax cuts or anything else. is there a chance that the market is kind of sorted all this out already in terms of how good tech earnings are going to look this quarter or into this year >> i think, mike, to some degree they already have. outside of the energy sector,
4:26 pm
which is obviously bouncing back from a depressed earning cycle, tech is expected to do the best not only in terms of revenue but as well as on earnings growth. i think that's helping support tech sock even in the midst of a selloff because buyers know that's where growth and earnings will come through to more broadly speaking, i think if you look at the space in general, it continues to prosper from not only strong domestic growth as well as global backdrop so the cap x upcycle isn't a proprietary to the united states. >> but i don't see you with the high fliers, so other names later this week. thanks, guys. >> thanks for having us. have a couple more earnings coming our way at this hour. but we'll bring that to you -- that's going to be our tease plus, we'll talk about whether the two-day selloff is the beginning of a correction. beginning of a correction. the "fapowerful batteriesping
4:27 pm
that make everything from cell phones to rail cars more efficient. which helps improve every aspect of advanced rail technology. all with support from a highly-educated workforce and vocational job training. across new york state, we're building the new new york. they are buying or selling right now.
4:28 pm
4:29 pm
see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade welcome back to "closing bell." shutterfly putting out their fourth quarter results, beating the street for both earnings and revenue. reporting earnings per share of $3.11 adjusted that's a mightily higher than what the street was looking for. revenue stronger at $594
4:30 pm
million. the full year revenue guidance and earnings guidance is very strong the first quarter is a bit weak. shutterfly also announcing it's buying privately held lighttouch photography, the group that does a lot of those school photos that will cost shutterfly $820 million in an all-cash deal. they're also suspending their share buyback. this is pushing the stock higher 15% after hours for shutterfly >> courtney, you triggered major flashbacks with life touch announcement oh, my gosh, senior year photos. they had us -- i was posed in a tree or something. graduation - >> now you can get it printed off potentially on shutterfly. >> those pictures are destroyed. courtney, thank you. that's a pretty big pop in the shares, nearly 15% nearly $2 billion market company as well. bob pisani is working the floor on a frenetic day. let's get back to him. >> kelly, it was an ugly day,
4:31 pm
but traders took note of the fact that there wasn't a lot of panic. that was very interesting. one thing helping was the lows were very early on low 1030 in the morning. we closed right near there you see, we meandered around after hitting the lows later in the day. in terms of what moved the market, the market internals, it was an ugly day. four to one declining to advancing. that's not a good day. the volume a little higher let's say 15% to 18% higher than normal that does not indicate to me that sellers came in and said, dump everything. that's not the sign we saul. voluntarily stillty level, vix was at 14. that's elevated but no particular panic there what we did see, the selloff was particularly acute in that global reflation trade we've talked about buying companies that are part of the global economic recovery we saw etfs in the transportation group oil and gas, commodity stocks were notably weaker. that xme, that's the metal etf
4:32 pm
south africa etf, commodity producing company. these are associated withed global reflation, those were the biggest. semiconductors, smh notably weak anything with robotics, botz, that was hot, that was notably weak gaming and video technology etfs, gmar was hot and that was weak you can buy these internet stocks in china that are hot through this etf, they were weak bottom line, momentum stocks were notably weak. anything associated with the global economic recovery, that was weak as well the final big question here, what about this end of the month window dressing, we don't know if that was a factor we'll know in two days, february 1st we'll answer all those questions. >> that's true bob pisani joining us to make sense of it is sam stovall at post nine,
4:33 pm
chief strategist at cfre you focus on earnings number how do you view the pullback against that >> i view the pullback basically is we got a bit overextended as of friday we were 7% above the 50-day moving average. 14% above the 200-day moving average. both of those are one and a half standard deviations above the mean but history says momentum doesn't like to give up too easily three months later we're higher 70% of the time. so, i think that we still have more upside potential for earnings in that 12.5% gain which is now forecasted versus the 10.5% that we've seen earlier. >> do earnings matter? when you start talking about the momentum of the market, i guess people need some fundamental thing to point to to keep it going or do they, or does it take on a lifeof its own >> it does take a life of its own but i think it has to be nishlg nish initially fueled by expectations that earnings are going up
4:34 pm
just before the tax cut was signed, s&p capital iq earnings estimates were for about $145 per share for the s&p 500. now it's at about 153. we think it will be 155 when all is said and done for 2018. so, that was the impetus but now the fomo, fear of missing out, is coming back into play and people are saying, oh, i've missed out. i really want to throw some money at this market that's when you have to start to worry. >> i was asking if -- today might might want be enough to do it, but if it's it turns into folo, fear of losing out momentum doesn't like to give up there's a lot of work about markets that were straight up and even when they kind of get a setback, maybe the melt-up is over but the upside continues in a choppier way are we in for that kind of a script >> that's certainly a possibility. actually, i was listening to you earlier. you were talking about 1998 is a
4:35 pm
good example we even saw that in 2000 that we basically had a big u-shaped formation as we got the initial selloff early in the year and had the attempt to come back by the end of the year. i really think investors have not been taught the reverse lesson they still want to buy on the dips i would tend to say that maybe this weakness will come in a more traditional fashion in the second and third quarters of this midterm election year, which historically are the two worst quarters of this 16-quarter presidential cycle. >> not a lot has gone to script for this cycle. >> that's right. >> sam, thanks for joining us. >> my pleasure. it's time for a cnbc news update with sue herera. >> hello here's what's happening at this hour the false hawaii missile alert has led to the resignation of that state's emergency management administrator and the worker who sent that alert has been fired this comes on the day the fcc filed its report on the incident, saying the worker thought an actual attack was
4:36 pm
imminent todd ricketts is expected to be named finance chair of the republican national committee, according to nbc news. rick et cete ricketts family is a major party donor and his family owns the chicago cubs he'll replace steve wynn. a cuban official says tourism to that island has slid in the wake of hurricane irma and also the trump administration's tighter restrictions on travel the number of visitors fell 10% in december. it's down 8% this month. a rare book from the library of george washington sold at auction for $138,000 in knoxville, tennessee the book was signed by washington, who gave it to his early biographer and his friend, the supreme court justice john marshall it last belonged to a man in chattanooga who passed away back in 2017. quite a find that's the news update this hour kelly, back to you
4:37 pm
>> thank you, sue. sue herera back at headquarters. we have another earnings alert. juniper networks courtney with those numbers. >> this is for juniper networks, fourth quarter, beat for earnings and revenue it's the outlook for the first quarter which really missed analyst estimates and that's pulling shares lower you can see down by 7.5% after hours. the company looking for first quarter earnings to be about 25 cents and the street had estimated 42 cents in addition, juniper networks is also raising its dividend by 80%, issuing a new $2 billion buyback and repatriating you can see it getting hit after hours because of that buyback. >> a couple big movers to the downside stocks sold off big for the second straight day. up next, the "fast money" ads tell
4:38 pm
to the hospital with good results. we call that the golden hour. evaluating patients remotely is where i think we have a potential to make a difference. u (barry murrey) we would save a lot of lives if we could bring the doctor to the patient. verizon is racing to build the first they're eyeing during this pullbackctions, they're eyeing during this it'll be possible to be able to operate on a patient in a way that was just not possible before. when i move my hand, the robot on the other side will mimic the movement, with almost no delay. who knew a scalpel could work thousands of miles away? ♪
4:39 pm
4:40 pm
apparently stocks can go down we're around session lows. the dow and s&p 500 having their biggest drop in five months.
4:41 pm
>> what are you looking for here do you need every single day to be roses and sunshine? it's not how it works. have you to be okay with a little volatility. >> the selloff coming before president trump's first state of the union address. >> we'll talk about the strength of the american economy. he'll talk about how america is open for business. he'll talk about how we're competitive in the world he'll talk about job creation. >> some breaking news, folks amazon, berkshire hathaway and jpmorgan chase announcing the three companies will be focusing on a new health care plan and rolling out a new company along the way. >> the dow is down 400 points. >> the dow going out with a decline of 362 points. that's a 1.4% drop nearly. dow, the worst performer of all the major averages >> and let's get to our "fast money" traders on this selloff are they buying? are they dumping steve grasso, steve seymour. what moves do you make >> at this is point you want to let it shake out a little bit, kelly. think about the epic run we've
4:42 pm
had, historic highs in the stock market this is just a couple of days of a selloff. we're way elevated this is -- we're about 5% above the 50-day, about 10% above the 200-day. i think there's room still to the downside if you had good quality companies, i believe we could go higher sit on your hands first. >> tim, you like some of the banks? >> well, think about where we are both in the economy and relative to history. the banks make the most sense to me in kind of a lake acceleration economy, you want to be in cyclicals obviously with banks in the pre versus post-crisis environment, what do you do in terms of rerating multiple? i think less regulatory environment, the banks look good we just got through earnings to me bank of america's earnings were very solid, very diversified. i don't think the banks will pull back that much but relative to where they should be historically and relative to earnings, they look interesting.
4:43 pm
>> kelly - >> go ahead, steve. >> you go first. >> in terms of the broad market, the odds say after going this will long without a 3% drop, a 5% pullback, any of that, we're due for one at some point this year if you buy into that. is this any reason to think this is the beginning of this or a coin toss? >> mike, i'd like to see this selloff play somewhere differently than the end of the month where you could say, okay, this is a rebalance, this is -- markets got a little ahead of themselves i do like the home builders here where everyone thinks rising rates will be the headwind the home building recovery that usually happens in a rising rate environment, i'm long powlty homes. i think that will show a little bit of an upset surprise. >> tim, what's on your tie, dragonflies? >> that's a good question. i've got obviously bull market horses, kelly. >> horses. >> so, kelly, have you seen a lot of ties with dragon flies? is that where you were going
4:44 pm
there? >> from faraway. i'll get those eyes checked. >> whatever this market needs, we like to give it to you. >> looking for some cosmic sign. thank you, guys. i'll let you go. steve grasso and tim seymour with his horses. catch all "fast money," 5:00 p.m. eastern, in about 15 minutes' time. president trump is set to deliver his first state of the union speech tonight he's been touting the gains of the stock market could today change his tune? i doubt it but 'lwel [ click, keyboard clacking ]s. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] what investors should listen for is next. what investors should listen for
4:45 pm
talk to one today and see why we're bullish on the future. yours.
4:46 pm
talk to one today and see why we're bullish on the future. you myour joints...thing for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember.
4:47 pm
the president is set to deliver his first state of the union address later tonight and he's repeatedly been touting the stock market gains and then we had the selloff today. will that spoil the show joining us to talk about this is dan clifton. great to see you welcome. >> thank you for having me on, kelly. appreciate it. >> i don't know if this is going to be the most boring speech of all time because everyone seems to know what's in it and that he's going to stick to script or if there will be curveballs. what's investable in it? >> i agree with you. there's been some downplaying in the speech which could lead to a surprise or two that's going to be in the speech i don't know what that's going to be. if you think about his two speeches investors rewarded which was his speech on election night at 3:00 in the morning where he was inspirational, let's come together, and his speech last february, which was similar to his state of the union but wasn't called the state of the union, and market rallied the following day after
4:48 pm
that speech. i think he'll have that same overall tone i would start off by saying his first part of his speech will be about the economy. yes, he'll tout the stock market yes, we were down today. but overall, that tax bill was very unpopular when it passed, and he has a 60 to 8g 0 million person audience to be able to tout the benefits that have come from that. the $3 billion bonus payments, the change of income taxes in people's paychecks and i think that's going to be his first goal and then from out there where we see investor interest is in infrastructure i think he's got a wonderful infrastructure plan. but it's very complicated. it's probably not going to pass in congress. so, this is his chance to make that case to congress, why his plan for infrastructure is better than the traditional way we've done it. and then the last point i'd make is what won't be in the speech, i think, will be important for investors. most investors are looking for
4:49 pm
the policy change that could put the strong gains in the stock market the number one issue investors point to is trade. there was some concern earlier this week that he was going to try and pull out of nafta. i don't believe that will be in there. but his language on china will be very important. in davos last week he talked about intellectual property being stolen from u.s. companies. it was vague if he gets more specific, kelly, i think it becomes a little more problematic for investors. overall, i think it will be a good, inspirational, positive speech very much focused on economics tonight. >> dan, it seems like the most acutely investable aspect would be infrastructure, as you alluded to there do you think people are essentially saying, there's not an appetite in congress to get anything big done, or where might this land? >> absolutely. we just did a big tax cut that's going to increase the deficit. we're talking about a $250 billion spending package for defense and nondefense how do you fit in $1 trillion
4:50 pm
infrastructure plan? i think it's very important it's $1 trillion over ten years the president makes that big case for the big plan, but as we start to deal with the appropriations process over the next couple of weeks and into march, i think you're going to slip in maybe 20 or $30 billion for two years, a down payment on that infrastructure financing. but not the overall complete plan frames the infrastructure debate. >> there's so much pomp and circumstance i enjoy watching the state of the union. >> dan, thanks for joining us. >> thank you, kelly. >> up next, what the options markets are telling us and saying about the selloff and whether or not it is a buying student and then coming up on student and then coming up on fast money, more o
4:51 pm
down day stay with use hospital must com. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and.
4:52 pm
4:53 pm
big selloff today. all the major averages closed lower. the dow by 362 points. the vix climbed higher that volatility gauge, it was over 15 briefly today, quite a pi spike we saw last year joining us, pete najarithanajarn tell us what it looks like in terms of volatility. what people are positioned for right now. what's the message >> you mentioned 15. it was 1542 i believe was the high it was an interesting day but it fell back down from those levels toward the latter part of the day. the interesting part today is not as much paper in the vix itself where we saw the most was the spoo spiders. in the april 270 puts, very
4:54 pm
aggressive sellers of those puts here's the key, we were stuck in that range for so long, we talk about the volatility index all the time call it a nine to 12 range, we were stuck in it forever and everybody said we'll get more volatility we've only had one close above 12 in january until yesterday we say when it's low you want to buy it 50,000 of those was the open interest, today over 50,000 were sold of those april puts so it's not saying this is the bottom but it's somebody who wants to take profits off the table. >> they reversed quickly >> so that was an existing holder taking profts, not somebody looking at the market down and saying oh, let me sell puts into this which would effectively mean if the market kept going down they would buy it lower, correct?
4:55 pm
>> yes, you're exactly right so this was somebody who was right, they positioned themselves right and by the way, they did roll those, mike, down to the 256 level out in april as well it doesn't mean we're going there, it doesn't mean we're going there in a hurry but somebody who was right is rolling the dice and buying a much less expensive option they want to be there for protection, maybe of a portfolio or just with the opinion that this market could sell off a little bit further down to the upside which i think when you listen to your guests today, everybody's been saying when is this going to happen when are we going to see this four or five or six or 10% pullback well, you have a nice couple days but still percentage wise this is not a huge move just yet. >> makes it sound so simple. i get the buying the puts, but when we start talking about selling them, no, you've lost me my head explodes pete, thanks for joining us. >> they're just taking profits but they're looking for maybe they could be more but thanks a lot. >> appreciate that
4:56 pm
the translation. pete najarian. we're just minutes away from amd's conference call. sharesre a selling off after their earnings earlier this hour hour we'll check on that anortfolio d liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. earnings to come right after thisrefully. earnings to come right after
4:57 pm
we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage.
4:58 pm
fidelity, where smarter investors will always be.
4:59 pm
welcome back checking on shares of amd, look at this. they're well off the downward spike. they were down about 6%, 7% after initially reporting their earnings it was a beat but some concern, of course, within the details, now they're fractionally lower. >> plenty of spin on the yo-yo it came back up. i don't think this is a macro call about where is the semicycle. it's definitely amd. they were a little implicated in that security issue with intel as well. >> fair enough. >> we'll see what they have to say about that. >> microsoft says it's suspended updates for intel on that flaw there's more still i feel like that we all need to learn about those vulnerabilities. this, though, would mean amd doesn't become -- if this continues, the call is about to start, it doesn't weigh -- >> i wouldn't say it's the bellwether of the group. right now we're caught in that emotional place of did we get enough of a discount and going into tomorrow facebook conspicuously -- it was up more than half a percent. >> i was just at a conference
5:00 pm
when someone suggested what are the new safe haven plays in a selloff? they posited it is tech. why would you go into consumer stables if you want that growth and that security. >> there was news, right facebook in the absence of news and anticipation of earnings tomorrow got a little bit. >> we'll cover that for you. that does it for "closing bell" today. "fast money" begins right now. "fast money" starts right now live from the nasdaq market site overlooking new york city's time square. i'm melissa li facebook cracks down on the cryptocurrency and a top market watcher says something has changed about the bitcoin story. he'll tell us what that is plus amazon takes no prisoners again. jeff bezos moving into health care and sending shock waves through the market but could it be the perfect buying student? we'll

70 Views

info Stream Only

Uploaded by TV Archive on